Real estate activity slowed down a little during September, when compared to August, but when we compare September 2012 with September 2011, the indicators were positive. Closed sales were up 19.4%, and the average sale price was up nearly 5% over that period.
There was a bit of a lull in the market about the time that kids were going back to school, but the floodgates opened on about September 15th. The change was dramatic. My phone starting ringing off of the hook, my listings were getting offers and buyers were taking advantage of the amazing weather to get out and look at property. Interest rates continue to be shocking, and buyers seem to sense that prices are going up. I have noticed dramatic price increases in the close in neighborhoods, and it appears that the "death spiral" that plagued the suburbs is coming to an end.
If you compare the median home price in Feb 2011 which was $215,000 with the median price in September of 2012 which was $238,300, you will observe a 10.8% price increase. I went to www.bankrate.com to compare interest rates in Feb 2011 with September's rates, and the difference is nothing short of amazing. The average 30 fixed mortgage has dropped from 5.23% to 3.55% over that time period.
The math works like this: In Feb of 2011, you could buy a median priced home for $215,000 with a 5.23% interest rate with a 20% down payment resulting in a monthly payment of $948/month. In September 2012 you could buy a median priced home for $238,300. Oh no, prices are going up! But you could get a 3.55% interest rate with 20% down, resulting in a monthly payment of $861. Unbelievable.